Pre-owned sales could account for close to a third of GAME’s revenue in 12 months’ time – as the firm looks forward to another year of double-digit growth for its trade-in business.
In alarming news for publishers, pre-owned generated 25.7 per cent of the firm’s revenues in a tough H1 2009 – up 12.3 per cent year-on-year.
GAME CEO Lisa Morgan told MCV this week that GAME enjoys significantly better margins” from pre-owned sales than from new games.
Last Wednesday, the GAME Group posted a 60 per cent year-on-year drop in profits for the six months to July 31st.
New income for the period fell from 35.5 million to 14.5 million.
The company said the fall was in line with company expectations, following a record year in 2008. Overall sales dipped seven per cent, down to 690.8 million.
Despite the downward trend, pre-owned sales leapt to 177 million in the period – representing impressive growth on the 157.8 million taken in H1 2008.
Morgan said she hoped to see similar growth next year. When asked if GAME expected another 12 per cent rise in pre-owned sales in H1 2010, she added: I can’t give guidance, but we would suggest you’ll continue to see the same kind of trend. Pre-owned makes significantly better margins than new.”
Morgan added that GAME expected pre-owned’s impact on sales to soften” during Q4, but admitted that the retailer would never deliberately limit trade-ins to please publishers.
It’s not up to us to restrict the way in which our customers buy,” she added.
For the full year ended January 31st, 2009, pre-owned revenues made up 18 per cent of GAME Group’s overall sales, up to 353 million from the previous year’s 257 million.